Collateral can be personal or business assets that can be sold in case the cash generated by the business is not sufficient to repay the loan. The value of the collateral is not based on market value but rather discounted to account for the value drop should the assets need to be quickly liquidated.

Typical collateral includes:

  • House
  • Car
  • Truck and heavy equipment
  • Office equipment
  • Inventory
  • Jewelry
  • Stocks and bonds
  • Mutual funds